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Improving the Use of Experimental Auctions in Africa: Theory and Evidence

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  • Morawetz, Ulrich B.
  • De Groote, Hugo
  • Kimenju, Simon Chege

Abstract

Experimental auctions have not been widely used in Africa. However, auctions are important tools for evaluating new products and technologies. To increase the quality of these experiments, we explore an alternative first-price bidding mechanism that is more similar to African market exchanges and we analyze factors likely to affect bidding. Experiments with African consumers show that the proposed first-price mechanism has no advantage over conventional second-price mechanisms. Results show high and significant cash-in-hand, experimenter, and time of day effects in main rounds, and significant ordering effects in test rounds. These effects need to be carefully considered when applying the Becker-DeGroot-Marschak mechanism in Africa.

Suggested Citation

  • Morawetz, Ulrich B. & De Groote, Hugo & Kimenju, Simon Chege, 2011. "Improving the Use of Experimental Auctions in Africa: Theory and Evidence," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), pages 1-17, August.
    • Handle: RePEc:ags:jlaare:117161
    DOI: 10.22004/ag.econ.117161
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    8. Salomón Pérez & Adewale Oparinde & Ekin Birol & Carolina Gonzalez & Manfred Zeller, 2018. "Consumer acceptance of an iron bean variety in Northwest Guatemala: the role of information and repeated messaging," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-23, December.
    9. Katherine P. Adams & Travis J. Lybbert & Stephen A. Vosti & Emmanuel Ayifah, 2016. "Using an economic experiment to estimate willingness-to-pay for a new maternal nutrient supplement in Ghana," Agricultural Economics, International Association of Agricultural Economists, vol. 47(5), pages 581-595, September.
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    11. Espérance Zossou & Rose Fiamohe & Simple Davo Vodouhe & Matty Demont, 2022. "Experimental auctions with exogenous and endogenous information treatment: Willingness to pay for improved parboiled rice in Benin," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(3), pages 806-825, September.
    12. Chege, C. & Sibiko, K. & Birachi, E. & Jager, M., 2018. "Are Base of Pyramid (BoP) Consumers Willing to Pay for Nutritious Foods? Evidence from Kenya and Uganda," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276021, International Association of Agricultural Economists.
    13. Fiamohe, R. & Agossadou, A.J. & Kinkpe, T., 2018. "Contribution of improved processing equipment to rice value chain upgrading in West Africa: Evidence from Benin," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275966, International Association of Agricultural Economists.
    14. Alphonce, Roselyne & Alfnes, Frode, 2015. "Eliciting Consumer WTP for Food Characteristics in a Developing Context: Comparison of four methods in a field experiment," Working Paper Series 01-2015, Norwegian University of Life Sciences, School of Economics and Business.
    15. Hambulo Ngoma & Paswel Marenya & Adane Tufa & Arega Alene & Lovemore Chipindu & Md Abdul Matin & Christian Thierfelder & David Chikoye, 2023. "Smallholder farmers' willingness to pay for two‐wheel tractor‐based mechanisation services in Zambia and Zimbabwe," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 2107-2128, October.
    16. Adewale Oparinde & Abhijit Banerji & Ekin Birol & Paul Ilona, 2016. "Information and consumer willingness to pay for biofortified yellow cassava: evidence from experimental auctions in Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 215-233, March.
    17. Gharib, Mariam H. & Palm-Forster, Leah H. & Lybbert, Travis J. & Messer, Kent D., 2021. "Fear of fraud and willingness to pay for hybrid maize seed in Kenya," Food Policy, Elsevier, vol. 102(C).
    18. Simons, Andrew M. & Ahmed, Milkiyas & Blalock, Garrick & Nesin, Bourcard, 2023. "Indigenous bone fertilizer for growth and food security: A local solution to a global challenge," Food Policy, Elsevier, vol. 114(C).
    19. Demont, Matty & Britwum, Kofi, 2022. "Local versus Imported: Understanding the Role of Colonial and Cultural Heritage in Shaping Mauritanian Consumers’ Rice Preferences," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322366, Agricultural and Applied Economics Association.
    20. Morgan, Stephen N. & Mason, Nicole M. & Maredia, Mywish K., 2020. "Lead-farmer extension and smallholder valuation of new agricultural technologies in Tanzania," Food Policy, Elsevier, vol. 97(C).
    21. De Groote, Hugo & Kariuki, Sarah & Traore, Djibril & Taylor, John R.N. & Mario, Ferruzi & Hamaker, Bruce, "undated". "Measuring consumers’ interest in instant fortified millet products - a field experiment in Touba, Senegal," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246973, African Association of Agricultural Economists (AAAE).
    22. Banerji, Abhijit & Birol, Ekin & Karandikar, Bhushana & Rampal, Jeevant, 2016. "Information, branding, certification, and consumer willingness to pay for high-iron pearl millet: Evidence from experimental auctions in Maharashtra, India," Food Policy, Elsevier, vol. 62(C), pages 133-141.

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